Senate passes stimulus plan

By Phillip Hudson

13 February 2009 — 11:50am

The Prime Minister, Kevin Rudd, has called independent Senator Nick Xenophon to thank him for his decision today to vote for the $42 billion economic stimulus package.

About $12 billion in one-off cash bonuses to low and middle-income families and workers will be paid from mid-March while the states and Canberra can begin rolling out more than $28 billion worth of spending on school repairs and upgrades, building new homes and providing free ceiling insulation.

The Government's recession-busting package passed the Senate today after Senator Xenophon struck a $900 million deal to bring forward money earmarked for future years for the Murray-Darling Basin and other water projects.

His vote, along with the five Green senators and Family First Senator Steve Fielding, gave the Government the numbers after the package had been defeated at an earlier vote in the Senate yesterday.

Last night Senator Xenophon met with the Treasurer, Wayne Swan, and Water Minister, Penny Wong, and had further meetings and conversations this morning. He also received a call from Mr Rudd, who thanked him after the deal was done.

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Today's deal between Senator Xenophon and the Government will bring forward $500 million over the next four years for water buybacks, $200 million in grants to assist local communities save water and to plan for a future with less water and $200 million on stormwater harvesting projects.

He said he was still not sure the package would save the country from a recession and there were huge questions over the decision to make cash payments.

Half the country seems to think they're a waste of money and it seems the other half wants and in many cases needs that money for essential purposes,'' he said.

He said he voted it down yesterday because a key part of the national economy, the Murray-Darling basin, had been ignored.

He voted for it today because that situation had been improved.

Yesterday, the Greens made a $435 million deal with the Government paid for by reducing the $950 cash-bonus bonus to $900. It included $40 million to be spent to build extra bike paths, $50 million in extra help for the unemployed and $300 million for one-off grants to church, charity and community groups for grass-roots job creation schemes.

The Government's original plan to make five cash-bonuses of up to $950 has been altered. The payment for single-income families has been cut to $900 while the payment for people with a taxable income up to $80,000 has also been reduced to $900. For those earning between $80,000 and $90,000 it has been cut from $650 to $600 and for those with a taxable income between $90,000 and $100,000 it had dropped from $300 to $250.

Mr Rudd told Parliament the Senate had voted in the national interest to support jobs and families and "not stand idly by while the global economic recession wreaks havoc''. He again accused the Opposition of being irresponsible by voting against the package.

The Opposition Leader, Malcolm Turnbull, said the Government was in "panic mood'' and was spending too much and in the wrong way and it would leave the nation with larger than necessary deficits and debt.

Business groups welcomed the Senate's approval.

The Australian Industry Group chief executive, Heather Ridout, said the package would help boost consumer and business confidence and spending.

"Senators have today done the right thing,'' she said. "Confidence is at very low levels and the package will be important in addressing this, and in providing practical and sustained support for economic activity.''

The Australian Chamber of Commerce and Industry chief executive, Peter Anderson, said the package would unlock infrastructure spending, provide incentives for business to invest in new plant and equipment and add a stimulus to household incomes.

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"While there is always a risk to the budget in a package of this type, and while legitimate scope existed to debate the mix of measures, today's decision is the right one for these extraordinary times. Even though there can be no guarantees we will not fall into recession, it will help steer the Australian economy through an unprecedented economic buffeting and, together with interest rate reductions, gives us the best prospect of not doing so,'' he said.